Discussions and thoughts in the areas of Social Media Marketing, B2B Social Media, Digital Marketing, Content Marketing, Social Media for Startups and more.

Thursday, December 16, 2010

Social Media ROI – Measurement Metrics

There is lot of excitement, curiosity and confusion around social media marketing. On one hand, there are a lot of organizations which are joining the social media bandwagon just because everyone seems to be there. On the other hand, there are others who are looking for ways to measure the ROI before they get into social media marketing.

For those looking for ROI measurement, I think the first thing they need to do is to think a little differently. I believe that the ROI measurement needs to go beyond number of visits and clicks etc. Here, conversation is more important than conversion. I suggest, before you start with social media marketing, first clearly define your objectives: Are you looking for leads and sales, are you looking to build a community of engaged and involved prospects and customers, are you looking to create brand awareness, are you looking to gather new ideas or are you looking to create online brand?

Once the objectives are defined, I think measurements become easier because the measurement metrics change based on those. Just be careful to not get excited about worthless metrics like ‘number of followers or fans’. Remember to also focus on quality and not just quantity. Here, the measurement metrics could be ‘the kind of people following your blog’, ‘number of influencers who tweet about you’, ‘number of people who actually used your TwtQpon’, ‘kind of engagement around a discussion on your Facebook wall’, ‘Number of retweets you get and from whom’, ‘reduction in support investment because of support through online community’, ‘number of new features your product users suggested to you’ and so on.

Here are some of the successful social media campaigns. There are many such successful campaigns. I have just picked these few:

Starbucks: Starbucks started MyStarbucksidea. Here, Starbucks asked its customers as to what they want from Starbucks. The social media success metric in this case would be number of suggestions gathered, number of unique suggestions which the company might not have thought of and number of suggestions which the company actually implemented.

Dell: Dell announces offers and promotions on Twitter. Here, the ROI is clearly measurable in terms of sales coming from Twitter, the number of people who availed the ‘Twitter Exclusive’ offers.

Target: The retail chain Target donates 5% of its income to charity. Last year, it decided to donate the money to charities which are selected by Facebook users. It did ‘Bullseye Gives’ campaign which essentially was a voting application connected to Target’s existing Facebook page. On this, it allowed users to select which charities they would like to see the funds. Money was given based on percentages. Here, Target not only just did good through charity, but it also increased the fan following of the brand. It can now be able to communicate with these fans in future.

As we see, the ROI metrics go beyond click through and more towards audience engagement and involvement.

According to me the problem that I see with companies around is that they want everything in one go. If you ask them their objective with their first social campaign it is very likely that you will get response as 'all of it' i.e. leads and sales, community of engaged and involved prospects and customers, brand awareness, new ideas and online brand.

So even if they achieve of that they will stamp the initiative as 'failure' or 'fad' that is OK to try out just once.

This has to be changed if we really have to see the success stories coming more from SMEs. They are the one who will benefit more from this campaigns. They are the one who have squeezed budgets. Biggies always have deep pockets to enjoy the promotion through traditional mediums.

@Mandar: I think this is where concept education is required. Once the benefits of socail media marketing are clear, my experience is that SMEs are also very open for it. And in social media, the biggest investment is of time. So once companies are in agreement to that, it is easy to 'measure' the results.